The National Bank said the reason behind the closure of private exchange offices is the intention to ensure stability of the currency market in Tajikistan and of the national currency, the somoni, as well as protect the interests of customers of Tajikistan’s credit organizations. The National Bank has also obliged credit organizations to document “every transaction involving the sale of US dollars to clients and citizens in a special manner by providing all the necessary data to identify buyers”. Local experts believe the move may result in the appearance of a black market for foreign exchange.

Tajikistan’s economy highly depends on labour migrants’ remittances and the country’s financial and economic sector is currently going through a rocky period”, said Nourov. “From 2000 to 2014, remittance inflows to Tajikistan showed an upward trend while a number of events that took place in 2014 seriously affected remittance inflows to the country.”

“As a result of this, the National Bank of Tajikistan (NBT) has begun to toughen regulation of the foreign currency circulation in the country and the closure of private currency-exchange has become the first step. I do not have information about the exact amount of currency transactions carried out through the private currency-exchange offices but it must be quite large if Tajik central bank has decided to suspend their operations.”

The expert considers that Tajikistan will pass the critical point of shortage of foreign currencies in late April or in mid-May. “The number of labour migrants going to Russia is increasing”, Nourov added.

An order released by Tajik central bank of April 16 says that for the purpose of providing sustainability of the country’s currency market and stability of the somoni exchange rate and protecting interests of customers of lending institutions operations of currency-exchange offices belonging to physical entities are suspended over the whole territory of the country beginning on April 17.

Meanwhile, the World Bank’s Migration and Development Brief, released on April 13, notes that growth in global remittances, including those to developing countries, will slow sharply this year due to weak economic growth in Europe, deterioration of the Russian economy and the depreciation of the euro and ruble.

Officially recorded remittances to the developing world are expected to reach $440 bln in 2015, an increase of 0.9% over the previous year. Global remittances, including those to high income countries, are projected to grow by 0.4% to $586 bln.

Tajikistan is the world’s most remittance dependent country, with remittances constituting 49% of GDP in 2013. In 2014, remittances to this country reportedly contracted by 8%, with dramatic declines occurring in the fourth quarter of the year.

The 2015 remittance growth rates in the World are the slowest since the global financial crisis in 2008/09. Nonetheless, the number of international migrants is expected to exceed 250 mln in 2015, and their savings and remittances are expected to continue to grow.

Remittances to developing countries in the Europe and Central Asia region will continue to decline sharply for a second consecutive year in 2015. Inflows are expected to total $42 mln this year, a decrease of 12.7% over 2014 when remittances declined by 6.3%, says the Brief. The economic contraction in Russia, a major remittance source country, has resulted in migrant job losses while the depreciation of the ruble has reduced the real incomes of migrant workers in Russia and reduced the value of remittances in US dollar terms. Central Asian countries are the hardest hit, due to their heavy dependency on remittances from Russia.